US economic data produced somewhat mixed signals in March, with the weaker indicators leading to a reduction in consensus forecasts for first-quarter 2016 growth. But, as had been the case in February, there was also enough resilience in the numbers to allay concerns about a more prolonged slowdown, according to the latest edition of Franklin Templeton Investment’s Global Economic Perspective, a monthly publication that analyses the key issues and trends shaping the global economic landscape.

The major surprise during the month was the extremely dovish stance of the US Federal Reserve (Fed) Chair Janet Yellen, which placed far greater weight than had previously seemed the case on external factors, including the slow pace of global growth and recent financial market volatility, and led to a sharp pullback in the US dollar as investors concluded US policy rates would remain lower for longer. One reason for the Fed’s caution may have been a concern about appearing out of step with the direction of interest rates in most of the rest of the world, where slower growth meant the likely trajectory of monetary policy still appeared downward, Franklin Templeton report said. International Monetary Fund Managing Director Christine Lagarde described the threat of an era of weak expansion as the “new mediocre,” and she urged more support from governments through structural and fiscal measures. However, data from China, the source of much anxiety among investors so far this year, improved somewhat over the month. The country’s official manufacturing PMI for March indicated expanding activity for the first time since July 2015, and the equivalent index for services also increased over the month, from 52.7 to 53.8.

“We feel general perceptions may paint growth in the global economy as worse than it actually is, though the current level of expansion is undeniably sub-optimal. To take China and India as two examples, their real growth rates may well be lower than official estimates but are likely, in our opinion, to remain respectable and well above levels suggested by some of the more bearish analysts. However, in the current uncertain environment, investors’ doubts about the effectiveness of monetary policies may continue for some time, extending a demand for perceived safe haven assets that could see their prices remain higher than fundamentals would otherwise suggest,” the report added.